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Totally. Political access and neo-corporatism along with manipulation of financial sectors has nothing to do with it.
From the article:
"Oxfam said that India's billionaires acquired their wealth in 'rent thick' sectors – industries where profits are dependent on access to scarce resources – 'made available exclusively through government permissions and therefore susceptible to corruption by powerful actors, as opposed to creation of wealth.'
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Of course that only happens in India.
Excellent, you seem to be reacting rationally - by noticing that statism and collectivism lead to evil outcomes.
Those 85 are staying way later ....they've gotta be working very hard.
I'm talking like 40,000 hours a week each minimum!
Well, there you have it. The knee-jerk wage-monkey's answer, based on the notion where everything is measured by the hourly rate.
Here's your paradigm shift: There are many things in this world that have value way beyond the number of hours it took to produce them. If someone writes a Pulitzer-winning novel, should the author only be paid by the hour? If someone comes up with a social media site that totally changes how people interact with one another and get their information, does that mean they are compensated by the hour? Some of Picasso's paintings took a matter of an hour or two. So should he have been paid in the same manner as the person who vacuums the floors or sorts the mail in the basement?
Of course not. That's stupid. Yet that's essentially the thinking of many. If someone develops something extraordinary, something that changes the world and manages to get it to market, gets it sold, builds a company, creates value for shareholders, etc., then they deserve every dime they get. Bill Gates or Steve Jobs or any number of people amassed their fortunes through having a highly-valuable idea, one that one person in 50,000,000 might be able to develop and see through to its final culmination in the market.
As an example, the computer revolution has added untold trillions upon trillions of dollars to the world economy through higher productivity and a host of new innovations that would have been impossible otherwise. Why shouldn't the pioneers of the business reap billions in reward? Over the past 49 years, Warren Buffett has increased shareholder value in Berkshire Hathaway by more than 500,000%, making lots of people wealthy and sustaining a lot of companies in the process. Why shouldn't he have the fortune he does? Nobody seems to have a good answer to that.
In fact, let's take that 40,000 hours a week analogy you cite. That represents the efforts of 1,000 people. But could those 1,000 people have developed the iPod? Could they have not only mustered the requisite vision to develop the music player, but the distribution channel, too? Could they have created the business model and executed it that flawlessly without leadership? Could they have negotiated the deals with the record companies? Oh, one or two might have been able to kick the can down the road a few feet, but Steve Jobs relentless drive in his average work week was worth far more than the 40,000 hours of the average worker.
I doubt I have issue with most of those 85 people. Certainly not Gates or his tech contemporaries. I don't know the full list, but I'm going to guess that most of them really did create something. And if you create something (or perhaps "borrowed" it from a company who didn't realize the potential, a la Gates/Jobs), build it into something big, respect the people who work for you and don't do anything truly evil (and no, Windows 8 is not evil compared to other social injustices), then bully for you, congratulations.
I do have issue with those a couple of levels below who are multimillionaires and didn't invent anything, aren't giving anything back and in general found their way to wealth through luck and connections and unethical dealings instead of taking personal risks and building something.
I really despise the "makers" vs "takers" positioning. I know a lot of pretty rich people who are takers and plenty less well off who are makers.
Excellent post.
I truly don't think that most people envy or hate anyone who happens to have more than they do. There will always be some people with the "crabs in a bucket" mentality that think that anyone who is more well off than they is "rich" and somehow owes them something, but those people are a small minority. Someone makes more money than I do, fine. I accept that life is full of tradeoffs and that there are some things I may not be able or willing to do in order to build wealth. I don't even necessarily begrudge people who happen to have good fortune or connections. What bothers me is when people resort to unethical means to acquire the almighty dollar, and that cuts across socioeconomic lines. I find welfare fraud and corporate malfeasance equally abhorrent.
It's disturbing to me that so many people seem to share the beliefs that net worth somehow correlates to intrinsic personal worth, and that people who are monetarily successful as so purely due to sheer grit, determination, and talent. It's just as disingenuous as saying that rich people are just "lucky". Is there seriously one fabulously wealthy person out there that had no benefit of connections, or a mentor, or the input of employees, or an angel investor, or so much as finding a penny on the sidewalk somewhere? I highly doubt it.
Well, there you have it. The knee-jerk wage-monkey's answer, based on the notion where everything is measured by the hourly rate.
Here's your paradigm shift: There are many things in this world that have value way beyond the number of hours it took to produce them. If someone writes a Pulitzer-winning novel, should the author only be paid by the hour? If someone comes up with a social media site that totally changes how people interact with one another and get their information, does that mean they are compensated by the hour? Some of Picasso's paintings took a matter of an hour or two. So should he have been paid in the same manner as the person who vacuums the floors or sorts the mail in the basement?
Of course not. That's stupid. Yet that's essentially the thinking of many. If someone develops something extraordinary, something that changes the world and manages to get it to market, gets it sold, builds a company, creates value for shareholders, etc., then they deserve every dime they get. Bill Gates or Steve Jobs or any number of people amassed their fortunes through having a highly-valuable idea, one that one person in 50,000,000 might be able to develop and see through to its final culmination in the market.
As an example, the computer revolution has added untold trillions upon trillions of dollars to the world economy through higher productivity and a host of new innovations that would have been impossible otherwise. Why shouldn't the pioneers of the business reap billions in reward? Over the past 49 years, Warren Buffett has increased shareholder value in Berkshire Hathaway by more than 500,000%, making lots of people wealthy and sustaining a lot of companies in the process. Why shouldn't he have the fortune he does? Nobody seems to have a good answer to that.
In fact, let's take that 40,000 hours a week analogy you cite. That represents the efforts of 1,000 people. But could those 1,000 people have developed the iPod? Could they have not only mustered the requisite vision to develop the music player, but the distribution channel, too? Could they have created the business model and executed it that flawlessly without leadership? Could they have negotiated the deals with the record companies? Oh, one or two might have been able to kick the can down the road a few feet, but Steve Jobs relentless drive in his average work week was worth far more than the 40,000 hours of the average worker.
So maybe the super rich or their spokespeople should change the line to be : "We are smarter and more creative than the poor" instead of "we work so many hours" ?
Not sure how good that would go over! This would make them present themselves as the chosen people...these 1 in 50,000,000 that as born with these extremely rare abilities that allowed them to achieve what they achieved rather than hard work.
If people thought that more than "these people just worked harder" pushed harder, put in more hours , people would be even more pissed off. If so many people were convinced they would never be rich we would definitely be a communist or socialized nation or world.
I agree that a business owner should benefit from their efforts, but the "rich work harder" thing is getting a little old .
So maybe the super rich or their spokespeople should change the line to be : "We are smarter and more creative than the poor" instead of "we work so many hours" ?
Not sure how good that would go over! This would make them present themselves as the chosen people...these 1 in 50,000,000 that as born with these extremely rare abilities that allowed them to achieve what they achieved rather than hard work.
If people thought that more than "these people just worked harder" pushed harder, put in more hours , people would be even more pissed off. If so many people were convinced they would never be rich we would definitely be a communist or socialized nation or world.
I agree that a business owner should benefit from their efforts, but the "rich work harder" thing is getting a little old .
The rich get richer during economic downturns because they have the capital to invest into the market. You dont buy stocks when the market is booming, you buy them at bargain basement economic downturns. Remember when Ford was 1.50 in 2008? The rich remember, because they increased their wealth 1000% off of bargains like that.
Why didnt the poor get rich during the economic crises? Because they didnt have the resources to buy at a bargain. Why are the poor lacking resources? Well thats a whole different argument.
The rich get richer during economic downturns because they have the capital to invest into the market. You dont buy stocks when the market is booming, you buy them at bargain basement economic downturns. Remember when Ford was 1.50 in 2008? The rich remember, because they increased their wealth 1000% off of bargains like that.
Why didnt the poor get rich during the economic crises? Because they didnt have the resources to buy at a bargain. Why are the poor lacking resources? Well thats a whole different argument.
Yeah that's definitely true.
You can't blame people with money for taking advantage of opportunity, also it wasn't guaranteed that Ford would survive, so there was a risk...that's why it was priced so low. Another one I regret not buying was Las Vegas Sands in 2009. It went up a lot since then.
I did buy Ford stock at $3something , but it's not like I bought thousands of shares so while it's nice to see that 'return' it's not lifestyle changing.
with 1000% returns even someone putting in 100k into the market could of literally become a millionaire.
I think another big issue is the mentality that "I'm poor, so why should I think about investing...I don't have money"..that sets one up for failure. If they come into money somehow, lottery, inheritance, or just through getting a better job..they don't know how to invest the money wisely because they don't have the financial education.
Also people could have formal education and have no idea how to invest wisely.
I think real estate is probably a better bet for people with little money as it allows more for leverage.
The stock market can be great if you already have wealth, but starting a business or investing in real estate (which is a form of business) is a better path to acquiring money faster.
Example if you have a $1,000 you can put that into the stock market and at the end of the year lets say you get that 12% return that people hope for, you have $1200 at end of year.
With the same $1,000 you can put a house under contract and wholesale/sell the contract you can use as little as a dollar to make the contract binding. You can spend the rest of the money on marketing and most people are looking to gain at least $5,000 on a wholesale deal. Of course this is more active than buying stock or a stock fund...but the return will be a lot higher.
Another example for business. You do some research and see that you can buy products for 50% less than retail. You spend $1,000 on products and resell them for $2,000 . You make $1000 profit , let's say that takes you a whole month..you are still way ahead. Let's even say 20% was spent on fees, ebay,paypal or fees for selling at a flea market . You're still at $800 profit.
On both of these examples the risk is very low. If the real estate deal doesn't go through you aren't out huge amounts..if you did research and see that the products can sell for more the risk is minimal. Also there is likely the opportunity to return the items if not sold.
You can even likely buy the items with credit cards ...thus using other peoples money to fund your business.
The idea of course would be to scale up with experience and put the money back into the business. Just think about what you'd have at the end of the year if you kept reinvesting the profits each month..
It's very hard to get these types of returns in the stock market with small amounts.
Once you build up enough money then investing in the market to preserve and grow wealth makes a lot more sense and is more "worth it" so to speak.
But when you have small amounts I don't see the market as providing great returns for most people. It takes the same amount of effort to buy $1,000,000 in stock as $1000 in stock. of course with 12% return the $1000 investor will make $120 versus $120,000 for the investor with $1million invested.
I think we often like to pretend we've come a long way from the world of royal Pharaohs who were catered to by the masses with pyramids constructed for their burials, and maybe our technology and ethics have, but when it comes down to greed and wealth distribution I feel we really have not.
Yahoo! recently did a piece on this topic an they basically said something similar. The fact that so many people have nothing is unfortunately nothing new. They made the point that nobody has even tried to calculate such things until recently. As horrid as conditions today may be, they are actually much better than they have been historically. That doesn't excuse the current exploitation that happens, but it does give it a proper context.
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